Backgrounder

Prabowo’s pursuit of Megawati’s PDI-P as the ‘One Piece’

President Prabowo Subianto has utilized the Lebaran (Idul Fitri) holiday to maintain his ties with key political figures, including Megawati Soekarnoputri, chairwoman of the Indonesian Democratic Party of Struggle (PDI-P). As the only major party that has not formally declared support for his administration, Megawati's potential backing represents the "One Piece": the final element needed for Prabowo to fully consolidate his leadership, an outcome he has long pursued.

Acid attack puts spotlight on Prabowo’s human rights commitment

KDMP financing model strains Village Funds, risks repeating KUD’s failures

The plan to finance President Prabowo Subianto's flagship Red and White Village Cooperatives (KDMP) program remains controversial, as the burden is set to fall on state-owned banks and the Village Fund. The Finance Ministry has stipulated that state-owned banks, supported by government liquidity, will finance the establishment of KDMP units, while the Village Fund will be used for repayment. Without strong governance, the program risks repeating the failures of the New Order's Village Unit Cooperatives (KUD).

Edition

March 13, 2026

When nutrition is crowding out education budget

Budget allocations for the free nutritious meal (MBG) program now dominate the education budget. A school feeding program that does not fundamentally serve a core educational purpose has instead become a primary focus within the government's education spending framework. This shift raises significant questions about fiscal priorities and the long-term health of the nation's pedagogical infrastructure.

Testing Indonesia’s Mideast evacuation contingency plan

Barely passing: Indonesia’s fiscal test after Fitch’s warning

Fitch Ratings recently revised Indonesia's sovereign outlook from stable to negative, although it maintained the country's BBB investment-grade rating. Fitch highlighted global geopolitical tensions and President Prabowo Subianto's free nutritious meal program as potential fiscal risks. While the government insists the massive free meals budget will remain and promises to maintain fiscal discipline, questions arise over whether fiscal policy is being designed primarily for economic stability and public welfare, or whether it is driven by political considerations.

Edition

March 6, 2026

Prabowo offers to mediate in US-Israeli war on Iran, but are there any takers?

Indonesia's official response to the attack on Iran by Israel and the United States is unusual to say the least. The Foreign Ministry in a statement said Indonesia deeply regretted the breakdown of the negotiations between the US and Iran, offered to mediate to break the impasse between the two countries, and added that President Prabowo Subianto had "stated his readiness to launch diplomatic visits straight to the heart of the conflict, if necessary".

Chasing the godfather: Oil corruption iceberg far from melted

US trade deal could compel Indonesia to pick sides

The Indonesia–United States Agreement on Reciprocal Trade (ART) reaches far beyond conventional tariff negotiations. While public debate has focused on potential export gains, the deal also includes provisions on investment, subsidy transparency and alignment with US regulatory standards that, over time, could narrow Indonesia's room for maneuver in shaping its own industrial policy and development strategy.

Edition

February 27, 2026

Desperately seeking funds for Red and White cooperatives

The Red and White Cooperative (KDMP) initiative is rapidly transforming from a flagship economic program into a mandate that must succeed at any cost. In its wake, the program is now cannibalizing the Village Fund, the very backbone of rural development and a decade-long symbol of local empowerment.

Prabowo changes Indonesia’s narrative on Palestine

Indonesia’s trade gamble amid Trump’s policy mood swings

Indonesia's much-celebrated breakthrough in lowering United States tariffs is already losing its shine. Just one day after the Agreement on Reciprocal Trade (ART) was sealed, securing a headline tariff cut to 19 percent, the US Supreme Court ruled that President Donald Trump's earlier tariff regime was unlawful. The question now is not how deep the cut appears on paper, but whether Indonesia has genuinely strengthened its bargaining position or is merely navigating an increasingly unpredictable trade landscape.